Italian-style chic, German technology and Brazilian inspiration made this tiny coupe a motor sport sensation - and ensured it lived up to its maker's Das Kleine Wunder epithet.

Here’s the perfect question for car experts who think they know everything: what makes an excited ring-ding-ding but looks like a shrunken Ferrari? Which car wears Pininfarina-style couture, from the Plexiglass covers on its headlights to its cheekily terminated tail, yet also trails gentle puffs of blue two-stroke clouds? Hardly anybody in Europe will know.

Do you? It’s a DKW-VEMAG GT Malzoni, and it was made in Brazil more than 40 years ago. You can be forgiven for not knowing about them, though – until now, none has ventured onto Europe’s roads. But in its homeland, the licence-built DKW with its bespoke bodywork is a star. Motoring enthusiasts venerate it as an all-time great, and local collectors hunt it with a burning passion.

And that’s no simple task. ‘Only about a dozen roadworthy examples are known today, as well as a couple of wrecks,’ says Boris Feldman, Brazilian collector and Malzoni owner. He’d never sell his, although anyone who wanted to dispose of a Malzoni would find a long list of would-be customers. That notion was brought home to Rodrigo Theise, a 33-year-old DKW restorer from the south of Brazil with family roots in Germany, at 2008’s national gathering of DKW fans in Caxambu: ‘A spontaneous offer was made for the blue Malzoni of over 150,000 real,’ he said. That was around £45,000 – a sum that puts the Malzoni into financial perspective.

The white one that shares space on these pages with the blue DKW is the best-known of them. In 1966 it wrote a chapter of motor sport history that every Brazilian fan knows by heart and today it belongs to Carlos Andre Sarmento, who has poured 2000 man-hours into its restoration.

The background for that great event was the racetrack at Interlagos. There, South America’s racing elite would gather each year for the Mil Milhas (‘1000 miles’), a highly prestigious race in which two drivers shared the wheel of the white GT Malzoni in 1966. One was called Jan Balder, the other was a certain Emerson Fittipaldi who was about to take a step up into Formula 1. For the time being they were both making waves at Interlagos, pushing their little DKW with its four-speed gearbox along for 1000 miles.

And the DKW gave its all. So much so that, with just three laps to go, the impossible looked possible – the little three-cylinder car was going to beat all the exotica. The smell of two-stroke oil was strong, but the whiff of an impending sensation was stronger. And then the dream faded. The little two-stroke that had run so courageously for hour after hour finally weakened. On two cylinders, Balder and Fittipaldi dragged it home in third place to great applause, but no victory. That didn’t stop the celebrations though, for even that result exceeded the wildest of pre-race expectations.

Mind you, DKW two-strokes were no strangers to the racetrack. As early as the 1950s privateers were entering their own saloons in touring car races, and DKW in Germany maintained a competition department that keenly contested rallies and long-distance races such as the Italian Mille Miglia.

Even the DKW licence-holder in Brazil, VEMAG (Veiculos e Máquinas Agricolas, or ‘Agricultural Vehicles and Machines’), maintained a competition department. With the cars designed just for everyday life, tuning was the hot topic of the day and, thanks to its simple, valveless design, the DKW could be persuaded to release more horsepower easily and cheaply. The front-wheel-drive running gear was also able to cope without buckling under the stresses imposed by the track.

Naturally, none of this happened overnight. The little Brazilian Belcar saloon put out a solid and durable 43bhp – enough to get you where you wanted to go, but not quickly. So Jorge Lettry, head of the VEMAG race team, was charged with making the robust two-stroke three-cylinder more powerful. Something also had to be done about the tall, heavy Belcar bodywork, beloved by taxi drivers throughout Sao Paulo and Brasilia, but top-heavy on the track. In the early 1960s they struggled in vain against the low and nimble Willys Interlagos, which was a Brazilian derivative of the French Alpine 108 – and just as vicious in the handling stakes.

Enter Genaro ‘Rino’ Malzoni in 1962, with a plan to match the power with new bodywork. Money wasn’t an issue: his family, with Italian roots, had grown rich on cane sugar, coffee and banking. What he had in mind was a small, pretty coupé in the GT class; something the girls would love, and which was quick enough to win races. A shortened DKW chassis with a tuned engine was a simple combination, easily available too – and that made the coupé a commercial proposition.

An enthusiastic racing driver, Malzoni sketched out the bodywork himself. It’s not hard to see where he got his inspiration: he took Pininfarina’s use of form as the basic recipe for his compact DKW two-door, and seasoned it with a dash of Bizzarrini and a pinch of Frua. Astonishingly, Malzoni succeeded in creating a timeless and perfectly balanced form whose crispness still fascinates today. Its proportions were just right, better than many of the sketches that came from the recognised masters of design.

According to one story, Malzoni invited the VEMAG bosses to a barbeque, showed them his creation, they drove it – and were impressed. So much so that in 1964 the car came onto the market as the GT Malzoni. Rino Malzoni set up for low-volume production, having the bodies made by hand from glassfibre laminate at his own company, Luminari. This was advanced technology for the time, and avoided the need for huge investment in press tools. Malzoni took no chances as far as strength went, and in places the glassfibre and resin were laid up as thick as your finger. DKW-VEMAG bought three for its own competition department, and supported Malzoni’s private initiative to get it into production. It took over the job of installing the mechanical components, and even allowed the coupé to be badged as one of its own.

The cars took to the racetrack immediately, and very quickly recorded their first successes: time and again the fleet-footed GT Malzoni pushed cars with far bigger engines off the podium. Jorge Lettry cut ever more courageous windows in the pistons to optimise the exchange of gases, worked on the shape of the exhaust system (so vital in tuning a two-stroke), and matched the result to a new set of gear ratios. Eventually he wound up the little three-cylinder engine to a scarcely believable 114bhp, easily surpassing the magic 100bhp-per-litre barrier.

‘At the end of the Interlagos straight it was doing nearly 190km/h [119mph],’ says Carlos Andre Sarmento. ‘That’s something nobody had believed the little car was capable of. Lettry performed miracles.’ The engine, once so demure, now screamed like an angry devil, whipping the 680kg coupé along the track at anything up to 7500rpm. The high state of tune compromised its reliability though; with more than 90bhp there were regular problems with pistons and conrods. Back in Germany, DKW’s engineers could hardly believe reports of what the Brazilians were achieving, at least not until the VEMAG team sent an engine to the parent factory. Brazilian two-stroke fans still smile about that.

The VEMAG dealers, on the other hand, had less to smile about. They soon figured out that the exotic new entry to the model line-up was far too expensive to be a success. Rino Malzoni and his team kept production going for a year or so, in which time they produced just 35 cars, then the first series ground to a halt. A second edition arrived in 1967 after Volkswagen bought VEMAG. Called the Puma, it was based on the platform chassis and mechanicals of the Brazilian-market VW Karmann-Ghia, then, from the mid-1970s, the VW Brasilia, and was built with coupe or convertible bodywork until 1997.

Still, it’s the early cars that matter. The young restorer Rodrigo Theise knows that. An inquiry had reached him from Germany; more specifically from Ingolstadt, the home of Audi (with which DKW had merged to form Auto Union in 1932). Ralf Hornung, who searched on Audi’s behalf around the world for important historic vehicles with which to complete the company’s collection, introduced himself with the urgent request to find a restored Malzoni and deliver it to Germany.

For many years Theise followed countless trails until he came across the blue car in these pictures. On one occasion an original body in neighbouring Uruguay slipped through his grasp; another time he came up against a collector who owned a Malzoni and even met with Theise, only to tell him: ‘You can’t see it. Take one more step and I’ll shoot you!’

Theise carried on looking. Acting on a tip-off, he searched back and forth across the area around Santa Cruz do Sul, peering into corners, asking questions and looking. Somewhere, someone told him, somewhere in this place are the remains of a Malzoni, a wreck. Late one afternoon shortly before he had to return to the city, he made one final stop at a petrol station and asked: ‘Is there a neglected old car around here, a VEMAG-DKW?’ The man banged an ice-cold cola on the bar and said: ‘Yes, I know of one.’

What happened next sounds like the screenplay from a spy movie. ‘Drive along this road for exactly six kilometers, then wait,’ the pump attendant instructed Theise. ‘At 7pm a VW Beetle will come by.’ Rodrigo drove off, waited, and shortly after seven o’clock a Beetle drove out of the night. At the wheel sat a farmer. Once more Theise drew the photos of the little coupe out of his pocket. ‘Have you seen one?’ he asked. The farmer nodded. Theise followed the Beetle to a river, and they got out. ‘Come,’ said the farmer, and led the way until they stood in front of the rotted remains of a glassfibre body.

The farmer had driven the Malzoni until the late 1970s, when he had a bad accident, and since then the bare shell had remained there. Theise felt like a prospector who’d washed the nugget of a lifetime out of the sand. What lay before him were the remains of a DKW GT Malzoni – and a lot of work.

The Malzoni duly arrived at Audi’s museum in Ingolstadt in 2009. ‘It was a project of the heart, not business,’ says Peter Kober of Audi Tradition, ‘and the car will not merely be marvelled at in the museum – it will also appear on the grid in classic car races.’

Now, 44 years since the Malzoni’s historic near-victory, Jan Balder (the driver) and Miguel Crispim (VEMAG’s race mechanic) are quarrelling about what caused the problem so close to the end of the race. Balder blames the failure on the ignition. ‘A plug lost its spark,’ has been his contention since 1966. A technical defect robbed him of his victory. But Crispim, who knows every cubic centimetre of that tiny yet highly tuned engine, passionately disagrees: ‘The drivers simply put on too many revs, far more than had been agreed, and stretched the technology beyond its limit just before the end of the race. As a result, one of the pistons seized. I saw the evidence myself when I took the cylinder head off.’

No matter. As far as the Brazilians were concerned, third in the Mil Milhas felt as good as first, bearing in mind the more established opposition. And with only 35 built, finding a Malzoni is clearly worth the risk of being shot.